Abacus makes good amid possible sale

Frank Wolf
’s
Abacus Property Group
yesterday announced first-half ­underlying profits were up 8 per cent and foreshadowed a higher second-half dividend.

It also claims to have received local and overseas inquiries from potential buyers of an industrial portfolio of assets valued around $120 million.

“At the moment we are exploring opportunities," Neil Summerfield, head of investor relations said. “People are coming to us and we are open to approaches," he said, referring to potential buyers believed to include Blackstone’s Australian subsidiary,
Valad Property Group
. There was no pressure to sell, he said.

Mr Summerfield and analysts ­generally agreed the result was in line with expectations and due to deliver on full-year projections, including a rise in full-year dividends from 8.25¢ to 8.5¢.

Its portfolio is focused on core ­locations in major trading or central business districts. In value terms, it is divided 31 per cent office, 30 per cent storage, 27 per cent retail and 12 per cent industrial. More than 40 per cent of assets are based in NSW. Victoria and Queensland, the next two biggest states, account for about 35 per cent.

Underlying profits were up about 8 per cent to $46 million and the ­half-year dividend remained at 8.25¢, expected to rise to 8.5¢ full year.

Mr Summerfield said its focus on a number of smaller tenants, rather than one, large multi-floor tenant, provided some insurance against the difficult office leasing market.

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Fund performance dipped slightly to about 8 per cent, largely because of lower assets under management. “It’s pretty much steady as she goes," Mr Summerfield said.

“We are on course to meet everyone’s consensus estimates."

Morningstar analyst Tony Sherlock said there were no unpleasant ­surprises and its diversified portfolio looked set to be able to deliver growth, despite difficult trading conditions in core markets. The company’s ­statement said a strong balance sheet would be used for acquisitions “over the near term" without providing any detail about what is on the shopping list.